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Japanese investors confident on Thailand's flood prevention efforts
Publication Date : 24-09-2012
Though they were among those hit hardest by the devastating flood last year, Japanese investors expect that Thailand will be able to manage water efficiency and prevent serious flooding this year to ensure investor confidence.
Setsuo Iuchi, president of the Japan External Trade Organisation (Jetro) Bangkok, said in an exclusive interview with The Nation that he expected the Thai government to continue its plans to prevent floods this year and in the following years.
"We understand that [flood] prevention will take years to handle," Iuchi said.
According to Jetro, Japanese insurance companies in Thailand estimate their total loss at about 200 billion baht (US$6.47 billion) from the flood crisis last year. However, real estimated losses are no less than 400 billion baht, including reinsured amounts.
As the biggest group of foreign investors in Thailand, those from Japan also expect the government to provide accurate and timely information in English about floods and other unexpected circumstances so that businesses can prepare to handle such problems.
"The government should give foreign businessmen accurate information in English. It will not only benefit Japanese investors, but also other foreign investors to have clear information and be able to monitor the implementation of flood-prevention measures," Iuchi said.
He said water levels this year were better than last year, so Thailand should be able to manage the situation more efficiently.
Iuchi pointed out that if a serious flood occurred this year, it would affect small investors' confidence. Some could withdraw their investment from the Thai market. However, he expects such a situation will not be seen thanks to flood-prevention measures of the Thai government in cooperation with the private sector to protect people and industries.
To avoid a repeat of last year's disaster, some businesses will still stay in Thailand by relocating to other areas within the country. However, some may relocate to other Asean nations.
Even so, Iuchi pointed out that Thailand would still be considered the major country in the region for major factories for Japanese industries, while at the same time, other Mekong River areas will serve as satellite factories for Japanese companies.
Countries in Asean that Japanese investors are looking at for expanding into to reduce risks from flooding in Thailand include the Philippines, with its strongly growing population of English-speaking workers, Indonesia with its giant domestic market, and Myanmar with its emerging growth.
Thailand is still one of the most attractive destinations and the largest base for Japanese investors in Asean. However, the Kingdom needs to continue to improve its competitiveness, especially in human-resource development to support expanded investment, he added.
Moreover, with the impact from the euro-zone economic crisis, Thailand and its Asean partners should strengthen economic integration under Asean-plus agreements to ensure East Asia's economic growth.
The Jetro chief said Thailand could continue to grow as a centre of Asean by focusing on manpower and education development.
US$1 = 30.8 billion